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Paccar forecasts continued growth, profits in truck market

Paccar forecasts continued growth, profits in truck market

May 05, 2005

Truck maker Paccar believes the recent boom in freight demand will continue to drive truck sales through the year.

“The commercial vehicle business is a growth industry and the North American truck market continues to benefit from strong demand,” said Tom Plimpton, president of Bellevue, WA-based Paccar, the parent company of truck makers Peterbilt and Kenworth in the U.S. and DAF Trucks in the United Kingdom.

“Freight levels are at historically high levels and trucking company profits are up 40% year-over-year,” he noted. “U.S. and Canadian Class 8 industry truck retail sales are projected to be 270,000-280,000 units this year, an increase of 15% over 2004 levels. The Class 6-7 truck market in the U.S. and Canada is also expected to improve slightly compared to last year.”

Aad Goudriaan, DAF’s president, added that the Western European truck market has grown faster than Europe as a whole due to ongoing vehicle replacement cycles and increased trade with Eastern Europe.

“For 2005, Western European truck deliveries above 15 [tons] are forecast to be approximately 240,000-250,000 vehicles, about 5% higher than last year,” he said. “DAF has increased its market share in each of the past five years, with 2004 share at 12.8% and over 14% in early 2005.”

As a result of this activity Paccar earned $274 million in the first quarter, an increase of 50% compared to the $182.2 million in profits it made during the same quarter in 2004. Paccar’s net sales and financial services revenues in the first quarter totaled $3.33 billion versus $2.5 billion for the first quarter of 2004.